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Credit Card Payment Processing in Electronic Commerce: An Analysis of the Bucket Pricing Strategy

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  • Yoris A. Au

    (The University of Texas at San Antonio)

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    Abstract

    Credit cards have been the dominant payment method for the electronic commerce retail industry. However, online retailers, especially the small to medium ones, continue to be disadvantaged by the seemingly arbitrary bucket pricing strategy implemented by the credit card processing companies. We address the following research question: “Can the credit card processors continue to economically justify the use of bucket pricing structure, especially considering the increased competition within the industry and from competing payment alternatives?” We use an economic model as a basis of our analyses and discussions.

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    File URL: http://business.utsa.edu/wps/IS/0091IS-296-2009.pdf
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    Bibliographic Info

    Paper provided by College of Business, University of Texas at San Antonio in its series Working Papers with number 0091.

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    Length: 10 pages
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    Date of revision:
    Handle: RePEc:tsa:wpaper:0091

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    Related research

    Keywords: Credit card payments; credit card processing; bucket pricing; tiered pricing; electronic commerce; online retailers.;

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